How a city you’ve never heard of sparked Canada's AI data centre debate

When plans emerged for a large AI data centre on Hamilton’s waterfront, residents pushed back. They questioned whether the local government had established adequate regulations before approving projects of this scale. Some councillors called for a moratorium, meaning a temporary pause or ban on new development.

Hamilton’s existing industrial zoning already allowed for data centres, but supporters of the moratorium argued that today’s large AI-focused facilities are different in scale and that the city’s existing definitions and planning rules may be outdated. Hamilton City Council ultimately rejected the measure, but the debate attracted national attention and helped bring concerns about hyperscale AI infrastructure into the Canadian mainstream.

What began as a local planning dispute in Hamilton has evolved into a broader national conversation about what these massive facilities mean for the communities that host them.

Hyperscale AI data centres require enormous amounts of electricity, water and land. Residents all over Canada worry about pressure on local power grids, noise from cooling systems, light pollution and environmental impacts. Others question whether communities receive enough, if any, economic benefit from facilities that require billions of dollars in investment but create relatively few permanent jobs once construction is complete.

Many are not arguing that Canada should stop building AI infrastructure. Rather, they are asking for the government to establish clear rules before projects move ahead, including standards for electricity use, environmental assessments, water consumption, community consultation and local benefits.

That local debate comes as Canada pursues an ambitious national AI agenda. The recently released report Data Centred: The Shifting Landscape of Canada’s Digital Infrastructure from York University’s Schulich School of Business illustrates the scale of that ambition. Canada already hosts 194 operational data centres, including five hyperscale facilities capable of training and deploying advanced AI models. Another 96 hyperscale projects have either been announced or are under construction, with roughly 92 per cent of planned capacity expected to be located in the province of Alberta. The report argues that AI data centres should increasingly be viewed as strategic infrastructure because they underpin a growing share of economic activity.

Under Canada’s new AI Strategy, Ottawa aims to support hyperscale AI data centres of at least 100 megawatts, with projects currently under development expected to deliver approximately 850 megawatts of AI computing capacity by 2030 and potentially expand to 2.3 gigawatts through further public and private investment. The strategy presents Canada’s clean electricity, cold climate and stable governance as competitive advantages in attracting AI infrastructure.

But the strategy also leaves some difficult questions unanswered. Ottawa has offered few details about when many of its commitments will take effect, how new privacy rules will work or how the government intends to respond if AI begins displacing workers on a large scale. The strategy says AI could help create 250,000 jobs by 2031, including 90,000 AI-related jobs and work opportunities for young Canadians. It says much less about the other side of that equation: how many jobs could disappear, which workers are most exposed and what support would be available to those forced to change careers. That gap has fuelled criticism that Canada has moved faster to encourage the adoption of AI than to put firm rules around its consequences.

Hamilton’s experience suggests that building public trust may become just as important as attracting investment. Communities are asking questions that extend well beyond land use. Who pays for the infrastructure upgrades needed to power these facilities? How should environmental impacts be managed? What benefits remain in the local economy once construction is complete? Those questions are likely to become more common as AI infrastructure expands across the country.

The Hamilton debate also points toward a larger issue that is only beginning to receive national attention: ownership. The York University report notes that Canada’s largest AI infrastructure is overwhelmingly owned by multinational technology companies, including Microsoft, Google, Meta and Amazon Web Services. The larger the facility, the more likely it is to be under foreign ownership. Thus, some experts suggest that ownership deserves greater attention, because it influences who controls strategic digital infrastructure, where future economic value is captured and how much of Canada’s AI capacity ultimately remains under Canadian control.

For now, Hamilton’s legacy may not be the failed moratorium itself. Rather, it may be that a city better known for blast furnaces than artificial intelligence became the first place to ask whether Canada’s AI future should be shaped not only by technology companies, but also by the communities expected to live beside the infrastructure that will power it.

As Canada accelerates its AI ambitions, that conversation is likely to continue. And over time, the debate may evolve from where hyperscale data centres should be built to a more fundamental question about who should own the infrastructure that powers Canada’s AI economy.